BBVA optimistic on bank prospects in Latin America

RIO DE JANEIRO, March 7 (Reuters) - Spanish bank BBVA (BBVA.MC: Quote, Profile, Research) expects to gain 7.5 million new Latin American clients by 2010, bank president Francisco Gonzalez said on Friday, touting growth opportunities in the region.

The bank also expects to triple lending to consumers in the same period and more than double the size of its mortgage business, according to the text of a speech Gonzalez gave at an Institute of International Finance (IIF) meeting in Brazil.

"We see reasons to be optimistic in Latin America: deposits are growing, loans to the private sector are rising very quickly, and nonpayment rates are falling," the head of Spain's second-biggest bank said.

Gonzalez said Latin America still has some obstacles to overcome before a true "culture of credit" takes root.

But he emphasized that, "Latin America's financial systems show strength at this time of crisis in international financial markets," attributing this partly to countries' reduction of macroeconomic and financial vulnerability.

Opportunities abound in Latin America, largely because the presence of banks is relatively low. Gonzalez stressed the importance of serving lower-income clients with new, flexible instruments and fostering further growth in microcredit.

"The great majority of Latin Americans are completely outside official banking or financial circuits," he said, according to prepared remarks.

On the downside, the Spanish banker cited excessive regulation, including obligatory lending to sectors deemed strategic and forced rate cuts on some loans, which force up the cost of other credits. (Reporting by Hilary Burke; Editing by Tim Dobbyn)